Solution Manual For Business Research Methods 11th Edition by Cooper

Chapter 01 - Research in Business
Chapter 1
Research in Business
CHAPTER LEARNING OBJECTIVES
After reading this chapter, students should understand
1.
What business research is and how it differs from decision support systems and
business intelligence systems.
2.
The trends affecting business research and the emerging hierarchy of research-based
decision makers.
3.
4.
The different types of research studies used in business..

The distinction between good business research and that which falls short of
professional quality.
5.
The nature of the research process.
KEY TERMS
Key terms are shown in bold, as they appear in the text, throughout the lecture notes.
DISCUSSION AND PROJECT IDEAS
PulsePoint: In each chapter we highlight a statistic that was drawn from a research
project. You might use this statistic to discuss a current phase of the research process
or a current issue. This chapters PulsePoint relates to hiring expectations of firms:
34The percent of employees who never consider that their bosses, clients, or
colleagues think before posting to a blog, discussion forum, or social network.
You might use this finding to stimulate a discussion on how organizations might
use research to track employee behavior on the job.
WWW Exercises:
Visit the Advertising World portal (housed at the University of Texas Web site).
Choose marketing research from the list of option and then link to one or more of
the research companies listed on the site. How does each demonstrate the quality
of their experience or their high ethical standardstwo of the characteristics of
good research summarized in Exhibit 1-5?
o http://advertising.utexas.edu/_world
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Ad Track is a weekly survey of how much consumers like or dislike a major

advertising campaign compared with other ads. Who sponsors this poll, and who
collects the data?
o www.usatoday.com/money/advertising/adtrack/index.htm
Class discussion or research project:
The relationship between research, the manager, and the researcher.

The conflict that can exist when the manager is the researcher.
The characteristics that identify good and bad research.
Have students investigate various journals for an article of interest to them. The
article should be no more than two years old and have sufficient content for a two
page report. The object of the critique is to describe how the study followed, or
failed to follow, the criteria for good research, as described in Chapter 1. Students
should speculate on which of the writers conclusions were warranted, and which
were not. (See handout on next page.)
Article Critique Instructions to Students

FROM:
TO:
SUBJECT:
Professor ________
Students in Research Methodology Course
Project ____________________________
For your first research project, please investigate one of the journals listed below for an article of
interest to you. The article should be no more than two years old. Choose one that has sufficient
content from which you can write a report a two-page report (approximately two double-spaced
pages).
The object of your critique is to describe how the study followed, or failed to follow, the
criteria for good research, as described in Chapter 1. Speculate on which of the writers
conclusions were warranted and which were not. In addition to Chapter 1, Chapters 2 and 3
may be helpful in getting you started.
Journals to consider:
1.
Academy of Management Review
2.
Administrative Science Quarterly
3.
Business and Society Review
4.
Decision Sciences
5.
Financial Management
6.
Harvard Business Review
7.
Industrial and Labor Relations Review
8.
Journal of Accountancy
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9.
Journal of Applied Behavior Science
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10.
Journal of Applied Psychology
11.
Journal of Banking and Finance
12.
Journal of Finance
13.
Management Review
14.
Personnel Journal
15.
Public Administration Review
16.
Training and Development Journal
Other journals may also be used.
CHAPTER VIGNETTE
BRINGING RESEARCH TO LIFE
Use this vignette to determine how well the student has identified what is going
on between sponsoring firm and possible research supplier and what tasks each
party is responsible for during and following the meeting.
Overview
Myrna Wines, director of consumer affairs for MindWriter, Inc., must assess
MindWriters CompleteCare program for servicing laptops.
She sent several well-respected research firms a request for proposal (RFP).
She and her team are interviewing the last of those firms, Henry & Associates.
Myrna wants to find a research supplier from whom she can learn, as well as one she
can trust to do high-quality research.
The last interviewee is Jason Henry, a partner in Henry & Associates who comes
highly recommended.
After viewing his presentation and conferring with her team, Henry & Associates is
chosen to conduct the required research.
They schedule a date to meet with CompleteCare personnel.
Jason Henrys tasks during the meeting:
Asking probing questions
Listening to the facts that have been gathered
Determining what the problem is from managements point of view
Identifying what the problem is at various levels of abstraction
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Myrna Wines tasks:
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Listening
Discussing
Looking at things from different viewpoints
Jason Henrys tasks after the meeting:
Measuring
Scaling
Project design
Sample
Finding elusive insights
Collaborating with Myrna in order to produce a report of results
CHAPTER LECTURE NOTES

WHY STUDY BUSINESS RESEARCH?
Business research is a systematic inquiry that provides information.
More specifically, it is a process of planning, acquiring, analyzing, and

disseminating relevant date, information, and insights to decision makers in ways
that mobilize the organization to act in ways that maximize business performance.
Managers use this information to guide business decisions and reduce risk.
Multiple types of projects can be labeled business research.
Decision scenarios:
Youre the manager of a full-service restaurant. Youve experienced significant

turnover in your waiter/waitress pool, and some customers have commented that
the once-friendly atmosphere is changing. Is this a problem for which business
research should be used? Where will you begin in trying to solve this problem?
Youre the head of the states department of transportation. You must determine
which roads and bridges will be resurfaced next year. You usually look at the
roads and bridges with the most traffic, in combination with those representing
the biggest economic disaster if closed. However, these are often located in the
most affluent regions of the state. Because your decision has numerous
operational, financial, and public relations ramifications, your manager suggests
using business research to assist with your decision making. Should you authorize
the research?
Decision scenarios and decision makers can be found in every type of organization,
whether for profit, non-profit, or public.
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Decision makers rely on information to make more efficient and effective use of
their budgets.
At no other time in history has so much attention been placed on measuring and
enhancing return on investment (ROI).
At a basic level, measuring ROI means calculating the financial return for all
expenditures.
Over the past dozen years, technology has improved our measuring and tracking
capabilities, while managers simultaneously realized their need for a better
understanding of employee, stockholder, and customer behavior in order to meet
goals.
Although business research helps managers choose better strategies, the cost of
such research is being scrutinized for its contribution to ROI.
A management dilemma is a problem or opportunity that requires a management

decision.
Factors that should stimulate your interest in studying research methods:

1. Information overload.
2. Technological connectivity.
3. Shifting global centers of economic activity and competition.
4. Increasingly critical scrutiny of big business.
5. More government intervention.
6. Battle for analytical talent.
7. Greater computing power and speed.
o Lower-cost data collection.
o Better visualization tools.
o Powerful computations.
o More integration of data.
o Real-time access to knowledge.
8. New perspectives on established research methodologies.
INFORMATION AND COMPETITIVE ADVANTAGE
Understanding the relationship between business research and information generated

by other information sources is critical for understanding how information drives
decisions relating to organizational mission, goals, strategies, and tactics.
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Goals
Even very different types of businesses have similar types of goals, which are related
to such things as:
Sales (membership)
Market share
Return on investment
Profitability
Customer acquisition
Customer satisfaction
Employee productivity
Machine efficiency
Maximization of stock price or owners equity
Decision Support
The need to complete exchanges with prospective customers drives every

organization.
An exchange can be a purchase, a vote, attendance at a function, or a donation to

a cause.
Each exchange, along with the activities required to complete it, generates data.
If organized for retrieval, these data constitute a decision support system (DSS).
During the last 25 years, advances in computer technology made it possible to

share this collected data among an organizations decision makers, over an
intranet or an extranet.
Sophisticated managers have developed DSSs where data can be accessed in real
time.
These managers have a distinct advantage in strategic and tactical planning
Business Intelligence
A business intelligence system (BIS) provides managers with ongoing information

about events and trends in the business environment.
In our restaurant scenario, it might be collecting customer comments.
In the MindWriter example, it might be data about laptops needing repair.
Exhibit 1-1 Some Sources of Business Intelligence
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Strategy
It costs less to retain a customer than to capture a new one, so businesses place a high
value on keeping customers buying.
That is why customer satisfaction, customer loyalty, and customer assessment

studies represent a significant portion of research studies.
Microsoft recently decided to tie its 600 managers compensation to levels of

customer satisfaction rather than to sales and profits.
Strategy is defined as the general approach an organization will follow to achieve its
goals.
A firm usually implements more than one strategy at a time.
The discovery of opportunities and problems, and the resulting strategies, often
result from a combination of business research and BIS.
Tactics
Business research contributes significantly to the design and selection of tactics.
Tactics are specific, timed activities that execute a strategy.
The purposes of business research include:
Identifying and defining opportunities and problems.
Defining, monitoring, and refining strategies.
Defining, monitoring, and refining tactics.
Improving our understanding of the various fields of management.
Emerging Hierarchy of Information-Based Decision Makers
Not all organizations use business research to help make planning decisions.
Increasingly, however, the successful ones do.
Exhibit 1-2 shows an emerging hierarchy of organizations in terms of their use of

business research.
In the top tier, organizations see research as the first step in any venture.
They use creative combinations of research techniques to gain insights that
will help them make better decisions.
They may partner with outside research suppliers.
Every decision is guided by business research.
There is generally enterprise-wide access to research data and findings.
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In the middle tier, decision makers periodically rely on research information.
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Decision makers turn to business research when they perceive the risk of a
particular strategy or tactic to be too great to proceed without it.
They rely heavily on tried-and-true methodologies, such as surveys and focus

groups.
They often choose the methodology before fully assessing its appropriateness to
the problem at hand.
There is limited access to research data and findings.
In the base tier, managers primarily use instinct, experience, and intuition to facilitate
their decisions.
Decisions are supported with secondary data searches.
They often rely on informal group discussion, a small number of individual

interviews, or feedback from the sales force.
Large firms that occupy this tier are often influenced by culture; smaller
companies because they think formalized research is too expensive to employ.
Managers who do not prepare to advance up the hierarchy will be at a severe

competitive disadvantage.
THE RESEARCH PROCESS: A PREVIEW

Exhibit 1-4 models the sequence of the research process . Recycling,
circumventing,and skipping occur. Some steps are begun out of sequence, some are
carried out simultaneously, and some may be omitted. The idea of a sequence is
useful for developing a project and for keeping the project orderly as it unfolds. The
research process begins with understanding the managers problem--the management
dilemma. In other situations, a controversy arises, a major commitment of resources
is called for, or conditions in the environment signal the need for a decision.
In every chapter, we refer to this model as we discuss each step in the process.
Exhibit 1-4 is an important organizing tool because it provides a framework for
introducing how each process module is designed, connected to other modules, and
then executed.
Is Research Always Problem-Solving Based?
Researchers often are asked to respond to problems that managers needed to solve.
Applied research has a practical problem-solving emphasis. The problem-solving
nature of applied research means it is conducted to reveal answers to specific
questions related to action, performance, or policy needs. Pure research or basic
research is also problem-solving based. It aims to solve perplexing questions or
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obtain new knowledge of an experimental or theoretical nature that has little direct or
immediate impact on action, performance, or policy decisions. Basic research in the
business arena might involve a researcher who is studying the results of the use of
coupons versus rebates as demand stimulation tactics, but not in a specific instance or in
relation to a specific clients product.
Both applied and pure research are problem-solving based, but applied research is
directed much more to making immediate managerial decisions. Is research always
problem-solving based? the answer is yes. Whether the typology is applied or pure,
simple or complex, all research should provide an answer to some question.
WHAT IS GOOD RESEARCH?
Good research generates dependable data that are derived by professionally

conducted practices, and that can be used reliably for decision making.
It follows the standards of the scientific method: systematic, empirically based

procedures.
Exhibit 1-5 shows actions that guarantee good business research.
Characteristics of the scientific method:
Purpose clearly defined.
Research process detailed.

Research design thoroughly planned.
High ethical standards applied.
Limitations frankly revealed.
Analysis adequate for decision makers needs.
Findings presented unambiguously.
Conclusions justified.
Researchers experience reflected.
Good business research has an inherent value only to the extent that it helps
management make better decisions that help achieve organizational goals.
The value of information is limited if the information cannot be applied to a

critical decision.
Business research finds its justification in the contribution it makes to the decision
makers task and to the bottom line.
A GLIMPSE AT FOUR RESEARCH STUDIES

From each of the illustrations of management dilemmas, we can abstract the essence of
research. How is it carried out? What can it do? What should it not be expected to do?
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Answer: (1) What is the decision-making dilemma facing the manager? (2) What must the
researcher accomplish?
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ClassicToys
You work for ClassicToys, a corporation that is considering the acquisition of a toy
manufacturer. Investigate six companies that are potential candidates. Pertinent data are
collected from publicsources because of the sensitive nature of the project: company annual
reports; articles in business journals, trade magazines, and newspapers; financial analysts
assessments; and company advertisements. The team members then develop summary
profiles of candidate firms based on the characteristics gleaned from the sources. The final
report highlights the opportunities and problems that acquisition of the target firm would
bring to all areas of the business.
MedImage
You are the business manager for MedImage, a large group of physicians specializing in
diagnostic imaging (MRI, nuclear, tomography, and ultrasound). A health insurance
organization has contacted you to promote a new cost-containment program. You begin by
mining data from patient files to learn how many are using this carrier, frequency of care
visits, complexity of filings, and so on. You consult insurance industry data to discover how
many potential patients in your area use this care plan, or similar care plans with alternative
insurance carriers, and the likelihood of a patient choosing or switching doctors. You attempt
to confirm your data with information from professional and association journals. You
develope a profile that details the number of patients, overhead, and potential revenue
realized by choosing to join the plan.
MoreCoatings
MoreCoatings, a paint manufacturer, is having trouble maintaining profits. The owner
believes inventory management is a weak area of the companys operations. In this industry,
many paint colors, types of paint, and container sizes make it easy for a firm to accumulate
large inventories and still be unable to fill customer orders. You look into the present
warehousing and shipping operations and find excessive sales losses and delivery delays
because of out-of-stock conditions. An informal poll of customers confirms your impression.
You familiarize yourself with the latest inventory management techniques. You ask the
warehouse manager to take an inventory, and you review the incoming orders for the last
year. You run a pilot line using the new control methodology. After two months, the data
show a much lower inventory and a higher order fulfillment rate. You recommend that the
owner adopt the new inventory method.
York College
You work for York Colleges alumni association. It is eager to develop closer ties with its
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aging alumni to provide strong stimuli to encourage increased donations and to induce older,
nontraditional students to return to supplement enrollment. The presidents office is
considering starting a retirement community geared toward university alumni.
The study consists of four parts.
Phase 1
A report on the number of alumni who are in the appropriate age bracket, the rate of
new entries per year, and the actuarial statistics for the group.
Phase 2
The next step in the study is to describe the social and economic characteristics of the
target alumni group. You review gift statistics, analyze job titles, and assess home
location and values. In addition, you review files from the last five years to see how
alumni responded when they were asked about their income bracket. You are able to
describe the alumni group for your director when you finish.
Phase 3
The third phase of the study is to explain the characteristics of alumni who would be
interested in a university-related retirement community. You make an extensive report
to both the alumni director and the university president covering the number of
eligible alumni, their social and economic standings, and the characteristics of those
who would be attracted by the retirement community.
Phase 4
The president needs to predict the number of alumni who would be attracted to the
project so that she can adequately plan the size of the community. Using the data
collected, you can predict the initial demand for the community and estimate the
growth in demand over the next 10 years.
What Dilemma Does the Manager Face?

In the ClassicToys study, the manager, the senior vice president for development, must make
a proposal to the president or possibly the board of directors about whether to acquire a toy
manufacturer and, if one is to be acquired, which one of the six under consideration is the
best candidate. In MedImage, the physicians in the group must decide whether to join the
proposed managed health care plan of one of their primary insurers. In the MoreCoatings
study, the owner of the paint manufacturer must decide whether to implement a new
inventory management system. At York College, the president must propose to the board of
directors whether to fund the development of a retirement community.
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The Types of Research Studies Represented by the Four Examples

All four studies qualify as applied research and can be classified as reporting, descriptive,
explanatory, or predictive.
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Reporting
At the most elementary level, a reporting study provides a summation of data, often
recasting data to achieve a deeper understanding or to generate statistics for comparison.. A
reporting study calls for knowledge and skill with information sources and gatekeepers of
information sources. Such a study usually requires little inference or conclusion drawing. In
the ClassicToys study, the researcher needs to know what information should be evaluated in
order to value a company. In the York College study, for example, interviewing the director
of local retirement facilities might have revealed other sources to include in the search.
Descriptive
A descriptive study tries to discover answers to the questions who, what, when, where, and,
sometimes, how. The researcher attempts to describe or define a subject, often by creating a
profile of a group of problems, people, or events. Such studies may involve the collection of
data and the creation of a distribution of the number of times the researcher observes a single
event or characteristic (known as a research variable ), or they may involve relating the
interaction of two or more variables. In MedImage, the researcher must present data that
reveal who is affiliated with the insurer, who uses managed health care programs (both
doctors and patients), the general trends in the use of imaging technology in diagnosing
illness or injury severity, and the relationship of patient characteristics, doctor referrals, and
technology-use patterns.
The descriptive study is popular in research because of its versatility across management
disciplines. In not-for-profit corporations and other organizations, descriptive investigations
have a broad appeal to the administrator and policy analyst for planning, monitoring, and
evaluating. In this context, how questions address issues such as quantity, cost, efficiency,
effectiveness, and adequacy.
Explanatory
For our purposes, an explanatory study goes beyond description and attempts to explain the
reasons for the phenomenon that the descriptive study only observed. Research that studies
the relationship between two or more variables is also referred to as a correlational study .
The researcher uses theories or at least hypotheses to account for the forces that caused a
certain phenomenon to occur. In MoreCoatings, believing the problem with paint stockouts is
the result of inventory management, the owner asks the researcher to detail warehousing and
shipping processes. The researcher tests this hypothesis by modeling the last year of business
using the relationships between processes and results.
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Predictive
A predictive study ,is rooted in theory like explanation. In business research, prediction is
found in studies conducted to evaluate specific courses of action or to forecast current and
future values. The researcher is asked to predict the success of the proposed retirement
facility for alumni for York College based on the number of applicants for residency the
project will attract. This prediction will be based on the explanatory hypothesis that alumni
frequent programs and projects sponsored by the institution because of an association they
maintain between their college experience and images of youthfulness and mental and
physical stimulation.
We would like to be able to control a phenomenon once we can explain and predict it. Being
able to replicate a scenario and dictate a particular outcome is the objective of control . In the
York College study, if we assume that the college proceeds with its retirement community
and enjoys the predicted success, the president will find it attractive to be able to build a
similar facility to serve another group of alumni and duplicate that success. Control is a
logical outcome of prediction. At York College, if a control study were done of the various
promotional approaches used with alumni to stimulate images of youthfulness, the
promotional tactics that drew the largest number of alumni applications for residency could
be identified. Once known, this knowledge could be used successfully with different groups
of alumni only if the researcher could account for and control all other variables influencing
applications.
ANSWERS TO DISCUSSION QUESTIONS
Terms in Review
1.
What is business research? Why should there be any question about the
definition of research?
Business research, as it is used in this text, is a systematic inquiry that provides
information to guide managerial decisions. More specifically, it is a process of
planning, acquiring, analyzing, and disseminating relevant data, information, and
insights to decision makers in ways that mobilize the organization to take actions that
maximize business performance.
Questions arise when people begin to provide their own definitions of research, which
in some way restrict the meaning of research to specific approaches, topics, or
procedures.
2.
What is the difference between applied research and basic or pure research? Use
a decision about how a salesperson is to be paid, by commission or salary, and describe
the question that would guide applied research versus the question that would guide
pure research.
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Applied research has a practical problem-solving emphasis. Basic or pure research

aims to solve perplexing questions or obtain new knowledge of an experimental or
theoretical nature that has little direct or immediate impact on action, performance, or
policy decisions. For applied, you might ask: In retail sales at Norstroms, how
would salary compensation affect monthly revenues? For the pure research question,
What compensation factors influence motivation to acquire sales leads, initiate
contacts, close sales, and continue post-sale service?
3. Distinguish between an explanatory and predictive research study.
An explanatory study goes beyond description and attempts to explain the reasons for
thephenomenon that the descriptive study only observed. The researcher uses theories
or at least hypotheses to account for the forces that caused a certain phenomenon to
occur. A predictive study, is rooted in theory like explanation. In business research,
prediction is found in studies conducted to evaluate specific courses of action or to
forecast current and future values. Control is a logical outcome of prediction.
4. Distinguish between a reporting study and a descriptive study.
A reporting study provides a summation of data, often recasting data to achieve a
deeper understanding or to generate statistics for comparison. A reporting study calls
for knowledge and skill with information sources and gatekeepers of information
sources. Such a study usually requires little inference or conclusion drawing. A
descriptive study tries to discover answers to the questions who, what, when, where,
and, sometimes, how. The researcher attempts to describe or define a subject, often by
creating a profile of a group of problems, people, or events. The descriptive study is
popular in research because of its versatility across management
disciplines.
Making Research Decisions
5. A sales force manager needs to have information in order to decide whether to
create a custom motivation program or purchase one offered by a consulting firm.
What are the dilemmas the manager faces in selecting either of these alternatives?
To choose either option, the sales manager must first determine the goals of the
motivation program, in terms of desired attitudes and behavior. He/she needs to know
the current motivation level of the employees, and the incentives or penalties that
would motivate them to adopt desired attitudes and behavior.If the existing program
can achieve the desired results, it would be the right choice. However, if it only meets
some of the requirements, the manager would have to weigh such things as total
benefits, cost, ease of administering the training, implementation time, cost and
development time of a custom program, and so on.
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6.
The new president of an old, established company is facing a problem. The

company is currently unprofitable and is, in the presidents opinion, operating
inefficiently. The company sells a wide line of equipment and supplies to the
dairy industry. Some items it manufacturers, and many it wholesales to dairies,
creameries, and similar plants. Because the industry is changing in several ways,
survival will be more difficult in the future. In particular, many equipment
companies are bypassing the wholesalers and selling directly to dairies. In
addition, many of the independent dairies are being taken over by large food
chains. How might business research help the new president make the right
decisions?
Student answers will vary. Sample answer:
Many different studies might be helpful in this situation. The most likely lines of
investigation should be on (1) the firms operating inefficiencies, and (2) its future
prospects in the changing dairy industry. In the first case, the president might want to
determine whether the inefficiency is caused by internal production problems, poor
organization, ineffective cost controls, weak sales management, and so on. This might
take the form of a company audit of internal processes. The examination of the
industry and the firms future in it would likely be directed at discovering possible
trends in consumption patterns and distribution systems. It might also entail polling
the end user of the products to see if anything other than price is prompting them to
buy directly from manufacturers.
Having this information would allow the researcher to either support the presidents
contention that inefficiency is the root problem, or rule it out. Further, it would allow
him to determine such things as whether any overlooked opportunities (markets)
exist, if his company is the only one experiencing problems, if the trend is likely to
reverse, and so on.
7.
You have received a business research report done by a consultant for your firm,
a life insurance company. The study is a survey of customer satisfaction based on
a sample of 600. You are asked to comment on its quality. What will you look
for?
I would ensure that the purpose of the research had been clearly defined; that the
research process had been thoroughly documented and planned; that limitations had
been revealed; that highly ethical standards were applied; that there was adequate
analysis; that the findings were straightforward (unambiguous); that the conclusions
were justified, and that the researchers credentials were stated. Further, I might
evaluate the demographics of the 600. Were they all in the same age range? From the
same region of the country? Buyers of similar insurance products?
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8.
As area sales manager for a company manufacturing and marketing outboard

engines, you have been assigned the responsibility of conducting a research study
to estimate the sales potential of your products in the domestic (U.S. or
Canadian) market. Discuss key issues and concerns arising from the fact that
you, the manager, are also the researcher.
This is a touchy situation. As a representative of the company, I would like to present
fair and unbiased facts. However, it would be tempting to slant the information. For
instance, a common source of bias is to understate demand. This makes sales goals
easier to achieve, which makes the sales department look good. Understating demand,
however, may mean that production gears down, which can negatively impact
availability and customer satisfaction, and hence the ability to make sales. And if
sales projections are too low, it may mean layoffs or territory consolidations.
On the plus side, it would help me pinpoint key products, salespeople, territories, and
customers. All of which could help me refine the sales force, its methods, and
training needs.
Bringing Research to Life

9.
In the Bringing Research to Life vignette, what evidence is presented of data

warehousing? Of data mining?
Data warehousing means storing information, from which useful information may be
gleaned. Data mining entails extracting this information from the warehouse in a way
that begets knowledge.
In this vignette, Myra Wines is looking for a way to study customer satisfaction. They
have access to the CompleteCare facility and its records, from which customer
information may be pulled. A rational assumption would be that the CompleteCare
service repair records is the data warehouse. From this, they need to mine such
information as customer names, most frequently repaired laptops, parts with the
highest failure rates, and so on.
From Concept to Practice

10.
Apply the principles in Exhibit 1-5 to the research scenario in question 8.

First, you would need to clearly define the purpose of the research. Is it to support
production expansion? Layoff of the sales staff? Increase or decrease in the number of
products sold?
Then, a research process would need to be defined. In other words, putting on paper
an overview of the entire research project.Following this, the research procedures
must be planned. Will data be based on past sales only? On customer or dealer
surveys? By interviewing salespeople? By obtaining and reviewing competitors
sales?
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Next, one must ensure that the report will be unbiased. What safeguards will be put
into place to safeguard the information provided by, and/or the personal information
of, the study participants? Who will ensure that the data gathered (and
recommendations made) will not exceed the scope of the study?
Then, if any limitations are recognized, they must be stated. For instance, sales
records are limited to the prior six months. Or, project sales may be affected by the
number of visitors to the boat show.
When the information is gathered, it must be tied to the collection instruments and
thoroughly analyzed. For instance, one should count ALL survey responses, not just a
sampling or percentage of them.
Findings should be clearly organized and presented in charts, graphs, and words, and
clearly tied to the conclusions or recommendations made. In other words, the findings
should clearly justify the conclusions.
And, finally, one should present his/her qualifications to both conduct the study and
make the recommendation.
From the Headlines
11.
Toyota had a major problem with unexplained acceleration in several of its top
models in 2010. It closed down production and stopped sales of multiple models.
What types of research might Toyota have conducted to make these decisions?
The Japanese car maker, long viewed as the leader in automotive quality, recalled the
2009-2010 model years of the RAV4 crossover vehicle and Corolla and Matrix
sedans; the 2005-2010 Avalon sedan; the 2007-2010 Toyota Camry, excluding hybrid
versions; the 2007-2010 Tundra pickup; the 2008-2010 Sequoia sport-utility vehicle;
and the 2010 Highlander SUV.
Mechanical research undertaken: Safety Research and Strategies, a Massachusettsbased safety research firm, identified 2,274 incidents of sudden unintended
acceleration in Toyota vehicles causing 275 crashes and at least 18 fatalities since
1999.
Toyota first identified problems with the accelerator pedals on the Tundra pickup in
March 2007. After months of testing, the company determined that the problem was
caused by the material in the accelerators' friction lever and made a change. At that
time, Toyota considered it a drivability issue unrelated to safety, according to its filing
with the National Highway Traffic Safety Administration. Furthermore, the
company's investigation found that condensation from heaters caused increased
friction in the gas pedal, making it stick in some cases. Toyota lengthened the arm of
the friction lever and changed its materials. As part of the recall involving pedal
entrapment with floor mats, Toyota said it would install a new brake override system
in all its vehicles so that if both brake and accelerator are depressed the brake will
take precedence.
1-22
Reputation and loyalty research: Toyota enjoys a deep pool of loyal customers built
up over decades of making high-quality vehicles for the reliability and longevity.
However, problems have been slowly building. The T100 pickup sold in the 1990s
failed to hit Toyota's usual mark for quality, Beginning around 1999, thousands of
Toyota owners complained about mysterious "sludge" buildup that wrecked their
engines, prompting criticism that Toyota was growing too fast and skimping on
quality; Toyota resisted the claims but settled a class action lawsuit brought by
owners in 2007. Toyota owners have also complained about faulty headlamps on the
Prius hybrid, and more than 100,000 Tundra pickups were recalled in 2009 for
problems with rusting frames.
Consumers have noticed. Surveys by CNW Marketing Research in Brandon, Ore.,
show that from 1997 to 2007, Toyota consistently ranked at the top for non-luxury
carmakers, neck and neck with Honda. For 10 straight years, consumers rated Toyota
9.1 or higher, on average, out of 10. In 2008, that rating slipped below 9 for the first
time, and in the latest surveywhich took place before the gas-pedal recall
respondents gave Toyota an 8.5 rating-- lower than Honda, Buick, Mazda,
Volkswagen, Ford, and even Saturn.
Financial research: On the business side, Toyota badly miscalculated when it built a
new pickup plant in Texas, with sales far below projections.
See the 2009 book, How the Mighty Fall, where business guru Jim Collins outlines
five stages of decline that many big companies go through.
Appendix 1a
HOW THE RESEARCH INDUSTRY WORKS

APPENDIX LECTURE NOTES
The research industry is one of extremes.

Very large suppliers account for the sales portion of sales in the industry.
Smaller firms and one-person shops dominate when you look at the number of
research firms.
Exhibit 1a-1 provides an overview of the suppliers within the research industry.
Internal Research Suppliers
Firms that rely on research to make decisions are likely to have an internal research
department or an individual who coordinates research initiatives.
The number of firms with internal research departments began to grow in the 1960s.
1-23
In the 1970s, researchers were often assigned to a functional area, such as marketing,
and reported to the executive in charge of that area.
The researchers influence at the strategic level was constrained by their role
order takers who reacted to the demand for research projects and reports.
Through the 1990s, the accuracy and actionability of the information provided by
research was thought to be low.
In 2001, the Cambridge Group and ARF sought to redefine the research function in
order to make it more relevant to senior management.
Based on executives feedback, research began to expand into such areas as:
Providing actionable insights
Reducing risk in marketplace actions
Improving return on investment
This evolution is consistent with Northwesterns Philip Kotlers contention that, as

costs rise, CEOs and board members demand greater accountability for decisions and
expenditures.
However, there is no trend toward staffing large internal research departments. In

poor economic times, internal research departments may be eliminated altogether,
because firms feel that such services are expendable or available from external
suppliers.
In some ways, the prominence of the DSS and BIS functions has forced the
researcher into an even more subordinate role.
While both information technology management and research are critical, in most
organizations the two functions have little to do with one another.
External Research Suppliers
More than 2,000 research firms operate in the United States.

Research Firms
Full Service Firms
Full-service researchers include some of the largest research firms, and some of
the smallest.
Exhibit 1a-2 identifies some of the largest firms.
These firms are often involved in research planning from the moment of
discovery of a dilemma or from the definition of a management question.
Such firms often have expertise in both quantitative and qualitative

methodologies, as well as multifaceted facilities.
1-24
Some are capable of working in worldwide venues, while others are limited to one
industry or geographic region.
These firms are often a combination of research and consulting operations.
Custom Researchers
Often described with phrases like ad hoc research or custom-designed

research
A custom researcher crafts a research design unique to the decision makers

dilemma. In other words, each project starts from ground zero.
What is implied is that such firms do not assume that a given methodology is
appropriate for each clients research.
Although a custom researcher may not always be a full-service research firm, a

full-service researcher would always fit into the custom research category.
Proprietary Methodology Researchers
A proprietary methodology is a research program or technique that is owned by

a single firm.
It may be a new method developed by the firm, or a twist on an established

methodology.
Firms often brand these methodologies to distinguish themselves from the

competition. (ACNielsen did this with its Homescan syndicated panel.)
The Gallup Organization reinvented itself using the proprietary research model,
moving from public opinion pollster and custom researcher to research-based
consulting firm.
Q12 is a Gallup proprietary methodology that uses 12 questions to measure
customer engagement.
Gallup uses these same questions with all clients, so Q12 serves as a
benchmark diagnostic for its subsequent consulting work.
These questions and the survey instrument are copyrighted to guarantee that
its intellectual property remains protected.
Having a proprietary method allows Gallop to charge significant premiums for
its research and consulting services.
Specialty Research Firms
Specialty researchers represent the largest number of research firms.
These firms specialize in one or more arenas:

Methodology
Process
1-25
Industry
Participant group
Geographic region
They may also perform a subset of a methodology specialty, such as:
Offering focus group moderators, but not the focus group facilities
Offering recruitment of focus group participants, but not the facilities or the
moderator
Firms doing observation studies are another subset of specialty researchers.
They often study retail shoppers

Envirosell and Design Forum both offer observation studies
Envirosells research is designed to make retail environments and processes

more productive.
Design Forum uses research to create internal and external environments that
establish and reinforce the retailers image.
Ethnography is a type of study that combines the skills of cultural anthropologists
with communication and business experts.
Firms providing Web page optimization research and Web performance metrics
are an emerging group of methodology specialists. (Yahoo!, NetIQ,
NetConversions)
Other specialty research firms:
MORInsight: employee research

Mercer HR Consulting: employee research
Survey Sampling, Inc.: suppliers of samples for telephone, mail, and online
surveys.
Greenfield Online: assists research firms by providing online samples and a
large panel of opt-in participants in the online community.
Qualtrics Labs: an array of software and service products
QuestionPro.com: complex surveys
PerfectSurveys.com: online surveys
Training Technologies, Inc.: designs, fields, tracks, and posts survey results
Specialty researchers often assist other research firms with their projects.
Syndicated Data Providers:
A syndicated data provider tracks the change of one or more measures over
time, usually in a given industry.
Product movement may be tracked through retail outlets and wholesale
environments.
Sales performance may be tracked through coupon drop, distribution of
product samples, special events, etc.
1-26
May also be responsible for tracking price elasticity.
1-27
Frequency of data collection and reporting is based on the need of the members in
the syndicate.
Nielsen Media Research is well known for its People Meter research that
reveals the viewing habits of television watchers. Data is collected four time
per year during sweep weeks.
Exhibit 1a-3 lists some syndicated data providers.
Omnibus Researchers
Specializes in fast survey research, such as 24- to 48-hour turnaround
An omnibus researcher fields research studies, often by survey, at regular,

predetermined intervals.
An omnibus study combines one (or a few) questions from several decision
makers who need information from the same population.
Typically bills by the number of questions ($700 to $1,500 per question).
Research generally done via phone or internet.
Exhibit 1a-4 shows samples of Omnibus studies.
Communication Agencies
Advertising, public relations, sales promotion, and direct marketing agencies are
heavy users of syndicated research data.
It is difficult to develop a creative strategy without research on target audience

knowledge, motivations, attitudes, and behavior.
Some agencies do extensive basic research on:
Ad recall and wear-out

Ad placement effectiveness
Effectiveness of creative approaches
ROI on media buys
Effectiveness of different action stimulants
All agencies do extensive testing when building a campaign. Such measures
combine custom research with syndicated research to explain why a campaign
was a success.
Consultants
Offer a wide range of services at the strategic and tactical levels.
All are involved in doing extensive secondary data research for clients.
May be major influencers in research design.
Are often involved in the interpretation of results.
1-28
Some conduct both qualitative (focus groups, expert interviews) and quantitative
studies (surveys) as they seek new opportunities or solutions to their clients
problems.
Trade Associations
Promote, educate, and lobby for the interests of their members.
Not all conduct or supply research services.
1-29

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Chapter 01 - Research in Business

The different types of research studies used in business..

The nature of the research process.

DISCUSSION AND PROJECT IDEAS

Chapter 01 - Research in Business

Ad Track is a weekly survey of how much consumers like or dislike a major

Class discussion or research project:

The relationship between research, the manager, and the researcher.

Article Critique Instructions to Students

Academy of Management Review

Administrative Science Quarterly

Business and Society Review

Harvard Business Review

Industrial and Labor Relations Review

Chapter 01 - Research in Business

Journal of Applied Behavior Science

Chapter 01 - Research in Business

Journal of Applied Psychology

Journal of Banking and Finance

Public Administration Review

Training and Development Journal

Other journals may also be used.

They schedule a date to meet with CompleteCare personnel.

Jason Henrys tasks during the meeting:

Asking probing questions

Listening to the facts that have been gathered

Determining what the problem is from managements point of view

Identifying what the problem is at various levels of abstraction

Chapter 01 - Research in Business

Myrna Wines tasks:

Chapter 01 - Research in Business

Looking at things from different viewpoints

Jason Henrys tasks after the meeting:

Finding elusive insights

Collaborating with Myrna in order to produce a report of results

CHAPTER LECTURE NOTES

Business research is a systematic inquiry that provides information.

More specifically, it is a process of planning, acquiring, analyzing, and

Multiple types of projects can be labeled business research.

Youre the manager of a full-service restaurant. Youve experienced significant

Chapter 01 - Research in Business

A management dilemma is a problem or opportunity that requires a management

Factors that should stimulate your interest in studying research methods:

INFORMATION AND COMPETITIVE ADVANTAGE

Understanding the relationship between business research and information generated

Chapter 01 - Research in Business

Maximization of stock price or owners equity

The need to complete exchanges with prospective customers drives every

An exchange can be a purchase, a vote, attendance at a function, or a donation to

During the last 25 years, advances in computer technology made it possible to

These managers have a distinct advantage in strategic and tactical planning

A business intelligence system (BIS) provides managers with ongoing information

In our restaurant scenario, it might be collecting customer comments.

In the MindWriter example, it might be data about laptops needing repair.

Exhibit 1-1 Some Sources of Business Intelligence

Chapter 01 - Research in Business

That is why customer satisfaction, customer loyalty, and customer assessment

Microsoft recently decided to tie its 600 managers compensation to levels of

A firm usually implements more than one strategy at a time.

Business research contributes significantly to the design and selection of tactics.

Tactics are specific, timed activities that execute a strategy.

The purposes of business research include:

Identifying and defining opportunities and problems.